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Thursday, December 22, 2016

Main trunk electrification was always a dud

The usual howls and wails of emotive knee-jerk reaction have come from Kiwirail's announcement to stop operating electric locomotives on the Main Trunk line.

It would cost NZ$1b to extend electrification to the Auckland network, and to Wellington. However, Wellington's network is electrified to a different voltage and on DC not AC, so dual-voltage locomotives would need to be bought. Even then, many of the trains on the line, going to and from branch lines (such as to the Bay of Plenty, Taranaki and Hawke's Bay) would still be operated by diesel.

However, the North Island Main Trunk electrification has always been a dud project since Rob Muldoon made the NZ Railways Department (NZR) embark on it as part of his Think Big central planning programme.

Main Trunk electrification was considered in the 1950s, after the line north of Wellington was electrified when it was deviated from what is now the Johnsonville line and placed in two double-track tunnels, so that trains were already operating electric from Wellington to Paekakariki (as steam locomotives couldn't run through the over 4km long Tawa Flat Number Two tunnel). A set of electric locomotives were bought that could have served on the main trunk (and were the most powerful locomotives in NZ until 1972), but spent their lives almost entirely dedicated to operating the Wellington to Paekakariki trains (until tunnels on the line north of Pukerua Bay were lowered to enable diesel to run all the way through).

However it was rejected and the decision was made to go diesel, not least because the government owned railways was conservative technically, and was not keen to adopt what it thought then was the "risky" AC electrification system (being widely rolled out in Europe, but not yet used in New Zealand). The DC system used in Wellington, Christchurch and Arthurs Pass was going to be too expensive, so diesel locomotives were bought to phase out steam.

The Think Big project came from an age when NZR had a general statutory monopoly on moving freight further than 150km. NZR was facing delays on the main trunk line because of growing export traffic. The problem, as it saw it, was a lack of capacity. Its solution was to upgrade the line, bypassing several bottlenecks with shorter deviations, new viaducts able to take heavier trains and some steep winding sections avoided, but also to electrify the line between Palmerston North and Hamilton. Why not to Auckland and Wellington? Because the bottleneck was in the middle, and the way NZR operated meant that many trains were broken up and shunted along the route at Hamilton and Palmerston North.

This was also an age with guards vans, with lots of small stations and sidings, as NZR's monopoly on long haul freight meant it handled small consignments of single wagons or even box loads. Towns like Paraparaumu, Otaki, Hunterville, Otorohanga and Huntly had shunting locomotives to handle freight, like they always had.

In short, NZR ran an old fashioned, inefficient railway, handling consignments better suited to trucks, and its solution to its congestion was not to propose competition (naturally), but an expensive grandiose engineering based solution.

Yet the Muldoon Government wasn't completely economically illiterate. Main trunk electrification was committed, and would end up costing $350m in 1990 prices, but in 1982 NZR was converted into a corporation, effectively becoming the first SOE. It would be required to make a profit, was no longer subject to political direction (except a Ministerial veto on closing lines) and would be subsidised directly for services that were unprofitable that the government required it to operate.

In 1983, Minister of Transport George Gair opened up domestic freight transport to competition, abolishing the 150km limit on road freight competition. In 1984, a major consultancy report by Booz Allen Hamilton for the Railways Corporation made major recommendations for it to be competitive and profitable with competition from road freight. This included closing two workshops, removing guards vans, closing small stations, moving from handling small lots of freight to trying to handle multiple wagon and train loads of freight.

The Railways Corporation reformed, but it still lost freight to road competitors over many years. In 1987, it commissioned Coopers & Lybrand to assess whether the main trunk electrification (that it was required to complete) could be an asset. The report concluded that even if electricity were free it would still be a net loss to the Railways Corporation annually. The only part of the project that made sense were all of the deviations.

As a result, when the Railways Corporation was restructured into a full SOE, it received $350m from taxpayers to bail it out of its Think Big project (after all the others were). Officially, the Main Trunk Electrification had no net value that could ever be recovered from users of the line.

In short, the main trunk electrification has ALWAYS been a dud.

After 30 years, the locomotives have become unreliable, many of the trains that now operate on the line have little operational need to be stopped at Hamilton and Palmerston North to change locomotives, wasting time, labour and fuel.

A project that was inspired by technocrats running a monopoly, decided by politicians engaging in Soviet style central planning, has come to its natural conclusion.

It's not worth spending NZ$1b to incrementally reduce CO2 emissions, which will make no more difference to climate change than stopping a child urinating in a lake will stop it being toxic.

Yet that wont stop the hyper-emotive railevangelist central planners making every hyperbole about this being some giant leap backward. The Otira-Arthurs Pass electrification was closed in 1997 once technology enabled diesel locomotives to run all the way through from the West Coast to Canterbury, the Christchurch-Lyttelton electrification was closed in 1970, as equipment was due for replacement and with the age of steam coming to an end, it could be dieselised.

Is it a shame that such a large project has proven to be not worthwhile? Absolutely, but it wasn't Kiwirail's fault, but the fault of the central planners of the Muldoon era - those the Labour Party and the Greens now ache to emulate, who chose to waste hundreds of millions of taxpayers money solving a problem that existed because of their regulation and archaic business practices it protected.

Kiwirail is a marginal operation at best, it doesn't need to have around its neck the vanity proposals of politicians who think they know best, and who think that saving every tonne of CO2 is worth unlimited amounts of taxpayers money.

Note though how odd it is, that the Greens, who all claim to care about CO2 emissions, continue to oppose foreign ships on international trips carrying domestic cargo as they travel between NZ ports. This has next to no impact on CO2 emissions, as the ships are sailing anyway, by using spare capacity on the ships to carry freight within New Zealand.

Why? Because the Seafarers Union doesn't like the competition. The bottomline is that the Greens prefer even socialism to reducing CO2 emissions.

2 comments:

Anonymous
said...

The 50's dieselisation was only ever meant to be a stop gap until electrification was sorted. The DA's were so successful that electrification was quietly shelved. Kiwirail is doing the right thing turning off the overhead (in fact it will be left on to deter thieves), as the DL's are more than capable of handling todays trains. Too bad the money used erecting the masts back in the 80's wasn't used to get rid of high maintenance parts of the line. Competing with road is tough when the entire road transport system from truck drivers to the stop/go guy on the road works gang is on pretty much minimum wage. Driving through Te Rapa a couple of days back reminded me of the hump system that was installed there back in the 60's but was never successful. Too many broken couplers for no operational advantage. Works well in other parts of the world though.

You are quite right, the benefit from electrification was the massive investment in improved track geometry and clearances including several major deviations. That will remain. Booz Allen strongly recommended against electrification but were ignored. I believe the locomotives are technically similar to the Eurotunnel freight shuttle locomotives and were built by Brush basically as a development test bed. During the planning stages there was an expectation that freight transit times would be dramatically improved (under 10 hours) but that was never achieved.

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About Me

Life, liberty and the pursuit of happiness. Politics, philosophy and economics from a pro-capitalist, libertarian, objectivist perspective. Born in New Zealand, live in the UK, career has been in transport, telecommunications and infrastructure policy.